If you are planning on leasing your property to tenants, keeping a tenant is what you need. So a longer lease term is a good idea, say 5 years instead of 1 is a good lease term, right? Well, maybe not. Here’s why.
Rentals are necessary. Not everyone can or wants to own a home. But we all need a place to live. Getting and keeping a good tenant is what every landlord wants. The problem is, when they sign the lease you have very little idea what kind of tenant they will be. Sure you did the background and financial checks and they came back ok. That still doesn’t tell you the character of the tenant or if they will be a problem. Let’s say they get into the home and you find out that they like to play loud music at 11pm. What if they invite someone else to live with them and that person is a smoker or drug addict or breaks the rules you put in place in some other way? What if they bring in a pet on the sly? All of a sudden that potentially great tenant has become a nightmare, and one you can’t get out that easily. Do you really want to be stuck with them for 5 years?
Another consideration is that the tenant may not want to be bound by a longer lease. Maybe they like to move after a certain amount of time. Maybe their job requires them to move every so often. Requiring them to sign a long term lease may not work for them, and you might lose a great tenant even before you get them.
Your best bet is to give a new tenant a year lease. That way you can gauge what kind of tenant they will be. If the first year is successful, then offer a longer lease. If they are a nightmare, then don’t offer to renew and give notice, per the current lease. If you want to keep them, leave the longer term up to them at that point. Make it clear to them you value their tenancy. Just don’t start long term. You could get burned!